Import competition and local labor markets: the case of Indonesia

Fina Sri Agustina (Department of Economics, Universitas Indonesia, Jakarta, Indonesia)

Economic Journal of Emerging Markets
Volume 10 Issue 2, 2018

This paper analyzes the effects of import competition on Indonesian local labor markets in term of manufacturing employment share, non-manufacturing employment share, unemployment rate, and wages. A rapid increase of globalization has caused many countries including Indonesia experienced a significant increase in imports, which lead to a tougher import competition. Using data of imports and 430 districts in Indonesia in the period of 2007-2013, we found that import competition has negatively affected manufacturing employment share, non-manufacturing employment share, and wages. It also increased unemployment. In addition, the highest impact was mainly driven by imports of consumption goods